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Cablegate: Demonstrations at Coal Mine Turn Violent

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DE RUEHKA #5452 2401027
ZNR UUUUU ZZH
R 281027Z AUG 06
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC 1128
INFO RUEHLM/AMEMBASSY COLOMBO 7545
RUEHIL/AMEMBASSY ISLAMABAD 1247
RUEHKT/AMEMBASSY KATHMANDU 8663
RUEHLO/AMEMBASSY LONDON 1508
RUEHNE/AMEMBASSY NEW DELHI 9298
RUEHCI/AMCONSUL CALCUTTA
RUEKDIA/DIA WASHDC
RHHMUNA/CDR USPACOM HONOLULU HI

UNCLAS DHAKA 005452

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ENRG EINV PGOV EMIN BG
SUBJECT: DEMONSTRATIONS AT COAL MINE TURN VIOLENT

1. Police and the Bangladesh Rifles opened fire August 26
on demonstrators in Phulbari (Northwest Bangladesh)
protesting UK listed Asia Energy Corporation's plans to begin
open cast coal mining in the area. At least seven protestors
were killed and 60-300 people were injured, according to
reports. Police claim to have opened fire when the crowd
brandished "lethal weapons" (reportedly ranging from pitch
forks to machetes and bows and arrows), became unruly, and
attacked police after police fired tear gas to disperse the
crowd. The demonstration was organized by the National
Committee to Protect Oil, Gas, and Mineral Resources, which
has campaigned against the coal project.

2. Protests continued August 27 and 28, with protesters
calling an indefinite hartal in the Phulbari area in protest
against the police action and to force Asia Energy to abandon
its business in Bangladesh. The Awami League has announced
its support for the local hartal and called for a nationwide
hartal on August 30.

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3. Asia Energy's Chief Executive Officer, Gary Lye,
expressed regret over the violence in interviews with the
press and added that it was unfortunate that
"unrepresentative outsiders" (referring to the National
Committee) had come to Phulbari to cause trouble. Econoff
was unable to reach Lye for comment, who was unavailable due
to the ongoing disturbances. Lye had previously discussed his
concerns about the National Committee with Econoff, claiming
that residents in the area that would be affected by the mine
strongly supported the project because of the economic
opportunities it would bring to the area. Lye maintains that
the National Committee is almost entirely made up of groups
from outside the area who, for their own interests, have
opposed Asia Energy's plans to develop coal in the region.

4. Asia Energy Corporation (Bangladesh) Pty Ltd is a
wholly owned subsidiary of London listed Asia Energy
Corporation. The company has an existing agreement with the
BDG to explore for coal on the Phulbari site and develop any
deposits. Asia Energy has determined that high quality coal
exists in commercially significant quantities and presented a
plan to the BDG in October 2005 to establish an open-cast
mine to extract these deposits. Under the terms of its
agreement, the BDG was to have acknowledged the feasibility
report within 90 days, after which Asia Energy could begin
mining. The BDG, however, has yet to take action on the
report. Once mining begins, Asia Energy expects to import in
excess of $300 million in U.S. heavy machinery and equipment
for operating the mine. The Asia Development Bank is also
reviewing funding proposals for significant rail and road
upgrades from Phulbari to the port of Mongla near Khulna and
improvements to the port.
BUTENIS

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